Question 1

What is a loan against a car?

Accepted Answer

A loan against a car is when you use your personal vehicle as an asset to borrow money.

Question 2

How does a loan against a car work?

Accepted Answer

The lender has the rights to your vehicle during the loan tenure. Once you repay the loan, you can get back your car with no liabilities.

Question 3

Can I continue using my car after taking out a loan against it?

Accepted Answer

Yes, you can use your car even if you have taken a loan against it. During the period of your loan, the lender has the title to your car until you pay off the loan.

Question 4

What is the loan amount I can get against my car?

Accepted Answer

The amount you’re eligible for depends on the current market value of your car and how old it is.

Question 5

What is the tenure for a loan against a car?

Accepted Answer

The repayment tenure for a loan against a car can be around 5-7 years. The maximum loan tenure varies based on the lender.

Question 6

How is the loan amount determined?

Accepted Answer

Your loan limit is based on the car’s value, your income, credit history, and more. Check the list of loan requirements before applying.

Question 7

What are the interest rates for a loan against a car?

Accepted Answer

The average interest rate for a loan against a car is 12.00% per annum.

Question 8

Is a loan against a car different from a car loan?

Accepted Answer

Yes, these two are different types of loans. A car loan is used to finance a new vehicle, whereas a loan against a car is used to fund personal requirements.

Question 9

Are there any restrictions on how I use the loan amount?

Accepted Answer

No, there aren’t any restrictions on your loan usage. You can use the loan amount however you want.

Question 10

Can I apply for a loan against a car online?

Accepted Answer

Yes, with us you can easily apply for a loan against a car online, just enter your number and submit the OTP.

Question 11

Who is eligible to apply for a loan against a car?

Accepted Answer

You are eligible to apply if you have a vehicle in your name, regular income, and a good credit score.

Question 12

Can I get a loan against a car if I have a low credit score?

Accepted Answer

Yes, you can get a loan against your car even with a low credit score. Just ensure you compensate for this by showing regular income and less debt.

Question 13

What is the minimum credit score required for a loan against a car?

Accepted Answer

A credit score of 750 is ideal for a loan application. Check your score online to see if you meet this minimum credit score requirement.

Question 14

Do I need to have a stable income to apply?

Accepted Answer

Yes, you do need to have a stable source of income. To verify this, the lender will ask for documentation like bank statements and salary slips.

Question 15

What documents are required for a loan against a car?

Accepted Answer

You will need to submit the below documents:

Question 16

Is it necessary to have my car registered in my name?

Accepted Answer

Yes, it is important to have the car in your name. Otherwise, you can’t pledge the same as an asset to borrow a loan against it.

Question 17

Can I get a loan against a used car?

Accepted Answer

Yes, you’re eligible to borrow against a used car. Before you apply, just check if your vehicle meets all the requirements set by the lender.

Question 18

Can I apply if my car is already under an existing loan?

Accepted Answer

No, you can’t apply for a loan against a car if the vehicle is already being used as collateral.

Question 19

Are self-employed individuals eligible for a loan against a car?

Accepted Answer

Yes, self-employed people can apply for this loan as long as they meet the criteria.

Question 20

Do I need to provide income proof to get a loan against my car?

Accepted Answer

Yes, you need proper documentation to apply for a loan. If you lack any document, connect with your lender to find which alternate proof you can provide.

Question 21

Can I foreclose my loan against a car before the tenure ends?

Accepted Answer

Yes, you can close your loan against a car, just ensure you’ve paid at least 12 EMIs. Once you pay regular EMIs, you become eligible for early loan closure.

Question 22

Is there a foreclosure charge for closing the loan early?

Accepted Answer

Yes, there is a charge of 2-3% on closing the loan early. The actual price of closure will depend on the outstanding balance.

Question 23

Can I make partial prepayments towards my loan?

Accepted Answer

Yes, you can do part payment to reduce the overall loan balance. This will save you some EMIs and reduce the tenure as well.

Question 24

How do I apply for foreclosure of my loan?

Accepted Answer

To request a car loan closure, connect with your lender via customer service or email.

Question 25

Will foreclosing my loan impact my credit score?

Accepted Answer

No, it won’t impact your credit score. The score will remain the same and have no negative impact on your credit history.

Question 26

Are there any tax benefits for prepaying a loan against a car?

Accepted Answer

No, there aren’t any tax relaxations for closing a loan early. Unless you’re using it for business purposes, you can claim a tax deduction on the interest paid for the loan.

Question 27

How long does it take for foreclosure to be processed?

Accepted Answer

It can take a few days to a few weeks to close your loan against your car. Once the loan is paid off, collect the NOC document.

Question 28

Do I need to visit the lender’s branch for loan foreclosure?

Accepted Answer

Yes, it is an option if the lender doesn’t have those services available online.

Question 29

What happens if I miss my EMI payments?

Accepted Answer

In case of unpaid EMI, you have to pay a penalty for the due amount. The late payment charge could be 2% of the owed amount.

Question 30

Can I negotiate the foreclosure charges with the lender?

Accepted Answer

Yes, you can negotiate for a foreclosure charge. If you have an existing relationship with the lender, it could come in your advantage.

Question 31

Is my personal information secure when applying for a loan against a car?

Accepted Answer

Yes, your information will be kept confidential. No one can access your personal information when you submit your application to the bank/NBFC.

Question 32

Will my car details be shared with third parties?

Accepted Answer

Read the terms and conditions carefully before agreeing to the loan agreement. If you see that your details will be shared with third parties, ask your lender to opt out.

Question 33

How can I ensure my data is not misused?

Accepted Answer

Check the lender’s privacy policy to make sure your information is not forwarded to any third party lender.

Question 34

Does the lender conduct background verification before approving the loan?

Accepted Answer

Yes, they do run a background check to ensure you’re worthy of a loan. If they find any poor credit record, the application would be denied.

Question 35

What security measures are in place for online loan applications?

Accepted Answer

Lenders use encryption to make sure your data stays confidential.

Question 36

Can I edit my application once it has been submitted?

Accepted Answer

No, once the application is submitted, you cannot edit the details. In such a case, you’ll have to raise a request with the lender for any changes.

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